Archives / January, 2007

How Do You Find A Good Law Firm?

Question: How do you find a good law firm? Which one’s can help me get in touch with VCs? Our Take: There are many good law firms out there doing start up work. What used to be seen as solely a costal practice, has now permeated through out the country. Most major cities have at least one…

I Want Control – Pretty Please

Today’s great VC blog of the day comes from Matt McCall who writes about The Myth of 51%.  As most early stage entrepreneurs know, the notion of “control” is an elusive one that ultimately kicks in when your company starts generating positive cash flow and you no longer need any capital from your investors.  As Matt eloquently…

Do VCs Care About Product Managers?

Question: How important is speaking to product management to a VC? While most do not sit on the management team, do you like to interact with them regularly? Our Take: Absolutely. VCs like to interact with all major functional heads of the company whether they are operations, finance, engineering, marketing, sales, product development and management,…

How To Craft A Term Sheet?

Question: A partner and I have presented a business opportunity to a private investor. After significant due diligence on both sides, and agreement in principle of terms, the investor has requested for us to present a term sheet. Where do I go from here? Our Take:  It’s somewhat irregular for the company to issue the…

How To Become a Venture Capitalist

One of the regular questions we get is “how do I become a venture capitalist.”  As there isn’t a well defined industry standard job description for “venture capitalist”, we thought it’d be useful to reach into the deep, dark, musty blog archives and reprint a post on How to become a venture capitalist – with minor edits…

How Do VC’s Think About Open Source?

Question: How does the VC community deal with open source? I am working on an embedded device that can be built either way, open or closed. This decision is complicated since our group (due to past successes) is capable of funding the first few rounds internally. We won’t need external VC until the last round…

How Expensive / Dilutive is VC Money?

One of the questions that we get the most is “How many percentage points of my equity should I give to a VC wanting to invest X dollars in my company?” The answer definitely falls into the “it depends” category, but our friends at Cooley Godward Kronish have a great report on what some general…

What To Do With An Alcoholic Business Partner

Question:  We have recently discovered that our business partner is an alcoholic.  He is integral to our business and we need to find him help.  He’s been to a couple of AA meetings, but doesn’t like the “atmosphere.”  Any recommendations?  I don’t expect you to provide recommendations for treatment facilities. However I am interested in…

How Do VC’s Determine Company Valuations?

Question: Valuation is often one of the first questions VC’s ask of companies seeking capital.  It seems that VC firms have their own way of doing a down and dirty estimate of the companies value.  Will you share some of the common “quick ways” they arrive at the companies value? The short answer is “no…

Should We Talk To VCs If We Aren’t Interested In Raising Money?

Question: We’re a profitable bootstrap NOT looking for institutional funding. Periodically we get inquiries from VC associates. Is there any reason we should or shouldn’t talk to them? Assuming they have plenty of deal flow, and we haven’t been introduced, why would they even bother? Our Take: If you are profitable bootstrap company and people…